Nvidia Investors Receive Notable Updates from CEO Jensen Huang
In this thrilling bull market, AI stocks have been the driving force of gains, and nobody's been leading the pack quite like Nvidia (NVDA -1.29%). Known as the world's premier designer of AI chips, Nvidia has crafted an impressive empire built on related products and services, consistently delivering double-digit revenue growth in the tens of billions every quarter. And in their latest earnings report, their success continued with record quarterly and full-year revenue that easily surpassed analyst expectations.
Now, you might be sitting there, wondering how long this incredible growth will last. With startups like DeepSeek training their models on less expensive chips, the potential for Nvidia's big customers to follow could dent their revenue in the future. But our boy Jensen Huang, Nvidia's chief, just unveiled some fantastic news that should ease your worries.
AI Task Master
Let's rewind for a second and dive into Nvidia's journey so far. The company commands the AI chip market, designing the fastest graphics processing units (GPUs) to tackle crucial tasks like model training and inference. Beyond GPUs, Nvidia has expanded into software and networking, offering a full suite of products to help companies build their AI development journey.
As the world's top tech titans rush to create AI infrastructure and programs, they've instinctively turned to Nvidia's powerful tools. And in the recent earnings call, Nvidia revealed that major cloud service providers account for about half of their data center business, and revenue from these customers has almost doubled year over year.
The Record Breakers
This momentum carried over into the fourth quarter and the full fiscal year 2025. Nvidia reported record quarterly revenue of over $39 billion, up an incredible 78% year over year. Their full-year revenue also hit new heights, soaring 114% to an astounding $130 billion. And once again, they continued their streak of crashing analyst estimates, with earnings per share coming in at 89 cents versus 84 cents expectations and revenue surpassing the $38 billion forecast.
Huang's Big Reveal
Now, let's unpack the excellent news Huang shared. In the quarter, Nvidia launched its new Blackwell architecture, a highly customizable platform boasting seven different chips, multiple networking options, and more. And guess how much Blackwell raked in during its inaugural quarter? A whopping $11 billion, representing Nvidia's fastest production ramp ever.
But the real gamechanger is Blackwell's suitability for one specific task that should keep customers coming back: inferencing. And with a focus on "reasoning," inferencing is the processing step that enables large language models to answer complex questions, a task that demands 100 times more compute power compared to earlier models.
"An immense number of our compute is actually inference, and Blackwell takes it all to a whole new level," Huang said during the earnings call. "We designed Blackwell with reasoning models in mind."
As a result, Blackwell boasts as much as 25 times higher token throughput – tokens are the units of data processed – and 20 times lower cost versus the Hopper chip.
No Need to Fret
DeepSeek's news about cheaper AI models triggered a decline in Nvidia's stock price, leaving investors worried about rival chip solutions. But with tech heavyweights committed to AI spending and eager to win in the long run, it's unlikely they'll switch to cheaper chips for their projects. For instance, Meta Platforms recently announced plans to spend up to $65 billion on infrastructure this year, ending the year with 1.3 billion GPUs.
Huang also emphasized the exceptional demand for Blackwell in the quarter, deeming it "extraordinary."
Additionally, Nvidia's superiority in inferencing – or actual performance of large language models – strengthens the notion that the company isn't in danger of losing business. In fact, it seems poised for an additional wave of growth, thanks to its prowess in this pivotal area. And that's why, even at its current valuation of 29x forward earnings estimates, Nvidia stock remains a solid buy.
- Nvidia's success in the AI chip market has been instrumental in their impressive revenue growth, as they consistently deliver double-digit growth every quarter, with earnings easily surpassing analyst expectations, even in 2025.
- In their latest earnings report, Nvidia revealed that major cloud service providers account for about half of their data center business, and revenue from these customers has almost doubled year over year, indicating a strong demand for AI tools.
- To address the growing demand for AI infrastructure and programs, Nvidia's new Blackwell architecture, launched in 2025, is designed to tackle inferencing tasks, which require 100 times more compute power than earlier models, at a lower cost.
- With tech giants like Meta Platforms committed to spending billions on AI infrastructure, and Nvidia's dominance in inferencing, it is unlikely that cheaper chip solutions will threaten Nvidia's market share, making Nvidia stock an attractive investment even at its current high valuation.
